§ Statement of Purpose

The View from 1776 presents a framework to understand present-day issues from the viewpoint of the colonists who fought for American independence in 1776 and wrote the Constitution in 1787. Knowing and preserving those understandings, what might be called the unwritten constitution of our nation, is vital to preserving constitutional government. Without them, the bare words of the Constitution are just a Rorschach ink-blot that politicians, educators, and judges can interpret to mean anything they wish.

"We have no government armed with the power capable of contending with human passions, unbridled by morality and true religion. Our constitution is made only for a moral and religious people. It is wholly inadequate to the government of any other." John Adams, to the Officers of the First Brigade, Third Division, Massachusetts Militia, October 11, 1798.

§ Books to Read

§ BUY MY BOOK

Tuesday, November 06, 2007

Financial Hurricane Ahead

While markets focus on the subprime mortgage crisis, an even bigger one is looming: the ever weakening dollar.

Twenty years ago we experienced the worst one-day stock market decline in history, a crash caused by the dollar and fears of trade protectionism. When both the Treasury Department and the Federal Reserve, under its new chairman, Alan Greenspan, seemed to signal that we wanted a feeble dollar, everyone suddenly wanted out of dollar-denominated assets.

Today gold in particular and commodities in general are blaring out that there are too many dollars in the market. The Fed shouldn’t increase interest rates, it should float them. Ben Bernanke & Co. should soak up the excess liquidity—over a 12-to 18-month period—until gold drops below $500 an ounce. More immediately the Fed should announce that this is what it’s doing so that markets can adjust in an orderly way to a newly stable dollar. The Fed can simultaneously make clear that it and bank regulators will make sure the financial system doesn’t abandon solvent borrowers.